Following the Long Expansion and the global financial crisis, money and monetary policy is now firmly linked (again) to both financial and fiscal stability. So how do we re-write the monetary rule book? Specifically, how many instruments do we have to control so many variables? And how should we deal with the unknowable threats that lurk in the nightmares of policy makers? And how much current growth are we prepared to give up in order to meet these threats?

Jagjit Chadha is the Mercers’ School Memorial Professor of Commerce at Gresham College and Professor of Economics at Kent. His next Gresham lecture will be held on 1 October: ‘The Cost of Business Cycles’. Click here for further information.